The operating rate of copper cathode rod makers declined as expected: possibly due to a gap in end-use projects [SMM Copper Downstream Weekly Survey]

This week, the SMM survey covered the production and sales of major medium and large domestic copper rod makers. The overall operating rate was 76.52%, a slight decrease of 2.37 percentage points, 0.25 percentage points higher than the expected value. (Surveyed enterprises: 21, capacity: 7.83 million mt).

This week, consumption gradually decoupled from copper prices. Although prices fluctuated downward during the week and the price spread between copper cathode rod and secondary copper rod was narrow, the shipments of copper cathode rod makers remained flat or declined, and the overall market performance was mediocre, not reflecting the usual peak season. According to the survey, most enterprises indicated that the current market weakness might be due to the pre-release of consumption in September, with almost no new consumption from end-use projects at present. Additionally, as the year-end approaches, some downstream enterprises are becoming conservative due to payment cycle considerations, leading to weaker overall orders.

From the inventory perspective, the capacity utilisation rate of large enterprises declined this week, resulting in some raw material stockpiling. The raw material inventory of major domestic copper cathode rod makers increased by 8.72% WoW to 39,900 mt, while the finished product inventories of copper cathode rod makers decreased by 8.55% WoW to 66,300 mt.

Looking ahead to next week, copper cathode rod makers lack confidence in the market outlook and expect the operating rate to slightly decline to 76.09% during the week of 10.25-10.31.